The Greek NPL Issue and a Possible Resolution Path

Andreas Koutras argues that the creation of an Asset Management Company or bad bank that would acquire most if not all of the 100 bn NPL would be advantageous to the Greek economy the Greek banking system and the society, provided, it is structured so as to minimise political influences and hazards. The AMC would operate for 15-20 years, allowing for a smooth work out of the loans and maximizing recovery rates. The cleaned banks would be recapitalised from the private sector. The proposal would cost less to European and Greek taxpayers and can be an engine of economic growth. Similar solutions have been applied to many countries the most recent in Italy and can be adapted to Greece.